NewEnergyNews: TODAY’S STUDY: Investor Concerns About Solar Stocks Emerge

NewEnergyNews

Gleanings from the web and the world, condensed for convenience, illustrated for enlightenment, arranged for impact...

December 7, 1941: Time to forgive but not forget.

The challenge now: To make every day Earth Day.

YESTERDAY

  • TODAY’S STUDY: How To Balance Competing Solar Interests
  • QUICK NEWS, December 6: Sliver Of Hope? Al Gore In Climate Change Meet With Donald Trump; The Opportunity In New Energy; Google Seizing New Energy Opportunity
  • THE DAY BEFORE

  • TODAY’S STUDY: A Way For New Energy To Meet Peak Demand
  • QUICK NEWS, December 5: Trial Of The Century Coming On Climate; The Wind-Solar Synergy; The Still Rising Sales Of Cars With Plugs
  • THE DAY BEFORE THE DAY BEFORE

  • Weekend Video: Trump Truth And Climate Change
  • Weekend Video: The Daily Show Talks Pipeline Politics
  • Weekend Video: Beyond Polar Bears – The Real Science Of Climate Change
  • THE DAY BEFORE THAT

  • FRIDAY WORLD HEADLINE-Aussie Farmers Worrying About Climate Change
  • FRIDAY WORLD HEADLINE-The Climate Change Solution At Hand, Part 1
  • FRIDAY WORLD HEADLINE-The Climate Change Solution At Hand, Part 2
  • FRIDAY WORLD HEADLINE-New Energy And Historic Buildings In Europe
  • AND THE DAY BEFORE THAT

    THINGS-TO-THINK-ABOUT THURSDAY, December 1:

  • TTTA Thursday-First Daughter Ivanka May Fight For Climate
  • TTTA Thursday-Low Profile High Power Ocean Wind Energy
  • TTTA Thursday-A Visionary Solar Power Plant
  • TTTA Thursday-EVs Have A Growth Path
  • THE LAST DAY UP HERE

  • ORIGINAL REPORTING: How The Clean Power Plan Drove The Utility Power Mix Transition
  • ORIGINAL REPORTING: How Utilities Are Answering The Distributed Energy Resources Challenge
  • ORIGINAL REPORTING: Looking At New Rates To Unlock The Utility Of The Future
  • --------------------------

    --------------------------

    Anne B. Butterfield of Daily Camera and Huffington Post, f is an occasional contributor to NewEnergyNews

    -------------------

    Some of Anne's contributions:

  • Another Tipping Point: US Coal Supply Decline So Real Even West Virginia Concurs (REPORT), November 26, 2013
  • SOLAR FOR ME BUT NOT FOR THEE ~ Xcel's Push to Undermine Rooftop Solar, September 20, 2013
  • NEW BILLS AND NEW BIRDS in Colorado's recent session, May 20, 2013
  • Lies, damned lies and politicians (October 8, 2012)
  • Colorado's Elegant Solution to Fracking (April 23, 2012)
  • Shale Gas: From Geologic Bubble to Economic Bubble (March 15, 2012)
  • Taken for granted no more (February 5, 2012)
  • The Republican clown car circus (January 6, 2012)
  • Twenty-Somethings of Colorado With Skin in the Game (November 22, 2011)
  • Occupy, Xcel, and the Mother of All Cliffs (October 31, 2011)
  • Boulder Can Own Its Power With Distributed Generation (June 7, 2011)
  • The Plunging Cost of Renewables and Boulder's Energy Future (April 19, 2011)
  • Paddling Down the River Denial (January 12, 2011)
  • The Fox (News) That Jumped the Shark (December 16, 2010)
  • Click here for an archive of Butterfield columns

    -------------------

    Some details about NewEnergyNews and the man behind the curtain: Herman K. Trabish, Agua Dulce, CA., Doctor with my hands, Writer with my head, Student of New Energy and Human Experience with my heart

    email: herman@NewEnergyNews.net

    -------------------

    -------------------

      A tip of the NewEnergyNews cap to Phillip Garcia for crucial assistance in the design implementation of this site. Thanks, Phillip.

    -------------------

    Pay a visit to the HARRY BOYKOFF page at Basketball Reference, sponsored by NewEnergyNews and Oil In Their Blood.

  • ---------------
  • TODAY AT NewEnergyNews, December 7:

  • ORIGINAL REPORTING: Turning Distributed Energy From Threat To Opportunity
  • ORIGINAL REPORTING: Solar Policy Action Heats Up
  • ORIGINAL REPORTING: Maine’s Almost Solar Policy Breakthrough

    Monday, June 13, 2016

    TODAY’S STUDY: Investor Concerns About Solar Stocks Emerge

    Solar Industry Update: Concerns over 2H Fundamentals Emerging

    Vishal Shah, 7 June 2016 (Deutsche Bank Securities)

    Bottom line

    In this note, we provide our thoughts and most commonly asked questions from investors following meetings with company managements and over 50 investors over the past few weeks. Our general take is that solar sector has still not completely emerged from the shadows of SUNE bankruptcy and balance sheet quality remains the biggest source of investor concern in the solar sector. Complicating the investment process is the complexity of solar business models and difficulty in modeling a path for sustainable cash flow generation. Against this backdrop, we prefer FSLR, SPWR and VSLR.

    Concerns over 2H Fundamentals Emerging

    We expect fundamentals to remain challenging in 2H16 as demand from China market could likely decline from 2H. With the US market unlikely to see the ITC rush and no other major market expected to pick-up the slack from China slowdown, investors are rightly concerned about the risk of oversupply from 2H16. Moreover, a significant amount of new supply is expected to come online in 2017 raising concerns over potential pricing/margin pressure for module manufacturers.

    Resi Leasing Sector Investor Sentiment Remains the Weakest

    Financing still remains the biggest question - for resi solar leasing companies, investors are generally concerned about the net metering policy changes in a few states such as Arizona, Nevada and implications for policy decisions in other states. Additionally, investors are rightly concerned about the availability of financing required to execute growth plans. Investor concerns are also fueled by the weaker than expected fundamentals (bookings and outlook) reported by most resi solar companies. We believe a combination of improving bookings momentum and execution on the financing front would be required for investor sentiment to improve. In the medium term, we also believe net metering policy overhang would need to be resolved for resi solar stocks to see meaningful share price appreciation. Most of these stocks are currently trading at or below the value of operating assets and investors are not giving any credit for the development business. VSLR remains our top pick within the resi leasing coverage universe.

    Traditional Developers/Manufacturers Also Remain In Penalty Box

    For solar developers/installers such as FSLR, SPWR, 2017 earnings/EBITDA outlook remains the biggest focus for investors. Concerns about rising Chinese competition and impact on module segment margins along with lack of visibility/profitability within the systems segment remains the primary investor concern. We like both FSLR and SPWR for different reasons. In the case of FSLR we believe concerns about 2017 earnings cliff are overblown. While we expect 2017 earnings to decline, the magnitude of decline would be less than feared primarily due to upside from systems segment as well as improving margins from series 5/6 production ramp. For SPWR, we believe the 2017 EBITDA would still be similar to 2016 levels due to 600MW of capacity expansion as well as more diversified business model mix. Pick-up in business momentum, which could be driven by bookings outlook would be an important catalyst for both shares, in our view.

    Chinese Solar, Inverters Unlikely to Gain Near Term Traction, Remain Selective with Yieldcos

    Chinese companies remain in a tough spot - investors are concerned about peaking margins, rising receivables and subsidy payment delays for domestic project developers. Stocks are not discounting much value for projects that these companies are holding on their balance sheet. Until and unless the outlook for China market improves - both from subsidy payment and installation volume standpoints, we do not see any meaningful catalyst for Chinese solar stocks. Inverter companies are similarly impacted by concerns about pricing pressure from Enphase as well as Chinese string inverter companies. We believe margin pressure in the inverter segment is likely to increase, however upside from the storage segment is not fully priced into these shares and prefer SEDG within this category. Finally, the yieldcos are challenged by weak capital markets environment and limited opportunity for near term drop downs which in turn is impacting medium term growth outlook. We do not expect CAFD to tap the capital markets in order to achieve 2017 dividend growth and expect shares to gradually grind higher as the company executes on dividend targets.

    Buy-Side Views/Our Take

    SCTY…SPWR…SEDG…ENPH…FSLR…

    IFTTT Recipe: Share new blog posts to Facebook connects blogger to facebook

    0 Comments:

    Post a Comment

    << Home

  • >